Borealis cuts ammonia production on high prices of natural gas

Author: Jonathan Lopez


MADRID (ICIS)--Borealis is to cut ammonia production due to the high prices of natural gas, a spokesperson at the Austrian major confirmed to ICIS on Thursday.

The company, which produces ammonia at several European facilities, would not disclose whether ammonia output will be cut across the board or just at some facilities.

The move by Borealis comes after other large European fertilizer producers cut ammonia production on the back of high prices for natural gas globally.

Last week, Norway’s major Yara and its peer OCI of the Netherlands announced output cuts; this week, Ukraine’s OPZ followed suit.

Short supply and high demand ahead of the winter season have caused natural gas prices to shoot up to record highs.

Borealis, a subsidiary of Austria’s energy major OMV, makes around 20% of its sales from fertilizers; ammonia is one of them.

The company said production of melamine, a petrochemical closely linked to fertilizer production, is not affected by the situation.

In 2020, Borealis’ sales stood at nearly €7.0bn.

 Q4 2020  Q4 2019 Change  2020 2019 Change
Sales 1,692 1,858 -9% 6,818 8,103 -16%
Net income 210 138 52% 589 872 -32%

“We run reduced ammonia production and will further analyse the situation. This is all the information we can provide,” said the spokesperson.

Front page picture: Borealis' facilities in Linz, Austria
Source: Borealis